Court’s Decision
The Supreme Court allowed the appeal filed by the parents of a 10-year-old boy who died in a road accident, setting aside the Madras High Court’s order that had reduced the compensation from ₹8,55,000 to ₹5,80,000. The Court restored the Motor Accident Claims Tribunal’s award, holding that the Tribunal’s assessment of income and heads of compensation was proper and in line with legal principles. The Court directed the respondent transport corporation to pay the amount awarded by the Tribunal, after deducting amounts already paid or deposited, within one month, along with interest as per the Tribunal’s or High Court’s directions.
Facts
A 10-year-old boy, while cycling to school, was hit by a bus belonging to the respondent transport corporation, resulting in his death. The Motor Accident Claims Tribunal found the bus driver negligent and awarded ₹8,55,000 in compensation. This amount included loss of dependency calculated on a monthly income of ₹5,000, loss of love and affection, funeral expenses, transportation expenses, and compensation for loss of dress, ornaments, and cycle.
The Madras High Court reduced the award to ₹5,80,000. It held that as per Schedule II of the Motor Vehicles Act, the income should be ₹30,000 per year and applied a multiplier of 15 considering the mother’s age. It also reduced funeral expenses, deleted amounts for transportation and loss of dress/ornaments/cycle, and granted ₹15,000 as loss of estate.
The parents appealed to the Supreme Court solely on the quantum of compensation.
Issues
- Whether the High Court erred in reducing the monthly income adopted by the Tribunal for a deceased minor.
- Whether the High Court was justified in deleting certain heads of compensation without adequate reasoning.
- Whether Schedule II of the Motor Vehicles Act could be applied to claims under Section 166 when negligence was established.
Petitioners’ Arguments
The appellants contended that the Tribunal rightly adopted a monthly income of ₹5,000 based on a Division Bench precedent for a similarly aged child. They argued that the High Court erred in applying Schedule II, which is relevant to no-fault claims under Section 163A, not negligence-based claims under Section 166. They also submitted that deletion of transportation and other miscellaneous expenses was unjustified and that the Tribunal’s award was fair and reasonable.
Respondent’s Arguments
The respondent corporation supported the High Court’s decision, arguing that Schedule II provides a standard basis for calculation and that the Tribunal’s income assessment was excessive. They defended the reduction in funeral expenses and deletion of certain heads as aligning with settled principles and statutory schedules.
Analysis of the Law
The Court examined the distinction between claims under Section 163A (no-fault liability) and Section 166 (fault liability) of the Motor Vehicles Act. It reiterated that Schedule II applies to Section 163A cases and cannot be mechanically applied to Section 166 claims where negligence is established. The Court emphasized that there is no fixed formula for determining the income of a child victim; courts must adopt a reasonable approach, considering precedents and circumstances.
The Court referred to National Insurance Co. Ltd. v. Pranay Sethi (2017) 16 SCC 680, where the Constitution Bench limited conventional heads of compensation—granting ₹40,000 each for loss of consortium and ₹15,000 for funeral expenses.
Precedent Analysis
- Division Bench of Madras High Court (cited by Tribunal) – Recognized ₹5,000 per month as reasonable income for a 9-year-old child in a fatal accident case.
- Pranay Sethi (2017) 16 SCC 680 – Fixed amounts for conventional heads like loss of consortium and funeral expenses, applied by the Supreme Court here to adjust specific amounts.
Court’s Reasoning
The Supreme Court held:
- The Tribunal’s adoption of ₹5,000 per month as income was justified and consistent with precedent.
- Schedule II could not be applied as the claim was under Section 166, not Section 163A.
- There was no justification for deducting personal expenses for a minor child.
- Even applying a multiplier of 15 (considering the mother’s age), the loss of dependency would be ₹7,50,000—₹30,000 higher than the Tribunal’s award.
- Funeral expenses should be ₹15,000 per Pranay Sethi, and filial consortium should total ₹80,000 (₹40,000 each to parents).
- Deletion of transportation and loss of dress/ornaments/cycle by the High Court was unwarranted.
- However, since there was no appeal by claimants seeking enhancement, the Tribunal’s original award was restored.
Conclusion
The Supreme Court set aside the High Court’s reduced award and restored the Tribunal’s compensation of ₹8,55,000. The respondent was directed to pay the balance amount within one month, with applicable interest.
Implications
- Reinforces that Schedule II cannot be mechanically applied to Section 166 claims.
- Affirms that there is no fixed formula for a child’s notional income in fatal accident cases; courts must adopt a reasonable, precedent-based approach.
- Highlights the importance of retaining justified heads of compensation unless clearly unwarranted.
Cases Referred
- Pranay Sethi (2017) 16 SCC 680 – Fixed amounts for conventional heads of compensation.
- Division Bench of Madras High Court – Approved ₹5,000 per month notional income for a minor in a similar case, guiding the Tribunal’s award.
FAQs
1. Can Schedule II be applied to all motor accident claims?
No, it is intended for Section 163A claims (no-fault liability) and not for negligence-based Section 166 claims.
2. Is there a fixed income for minors in fatal accident cases?
No, courts adopt a reasonable figure based on precedents and facts of each case.
3. Can funeral expenses exceed the statutory figure?
As per Pranay Sethi, conventional heads like funeral expenses are fixed at ₹15,000, unless there are exceptional circumstances.